It appears the pound is happy to trade in a state of limbo ahead of what’s bound to be a key political moment in the UK’s history books. Sterling seems unphased by economic numbers and is focused on the big prize – the December GE result. Yesterday was a prime example of the pound’s disinterest in UK datapoints. UK inflation came in well short of expectation, printing at its lowest level in a number of years – something which would usually push the pound lower by around half-a-cent. However, GBP refused to budge, clinging on to the $1.28 and €1.16 handle against the US dollar and euro, respectively. Another piece of data arrives this morning in the form of UK retail sales. If the last few days are anything to go by then one can presume there’ll be minimal reaction.
Elsewhere, markets remain obsessed with any US/China trade developments, as well as President Trump’s impeachment procedure which kicked-off yesterday with some incredibly interesting exchanges between the Democrats and Republicans. On the data-front, eurozone GDP and US inflation/unemployment claims will be eyed. This comes as the Fed chair heads back to Congress for another round of testimony. Yesterday’s was mostly the usual dull rhetoric which failed to produce any movement across markets.
Written by Viv Savani. 9:23am, November 14th 2019
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